be questioning. >> i think we already are. we will see one quarter that is negative territory. that is my personal opinion. yes, i think we would. david: we are not helping the market today. that is never a good sign, is it, dagen. dagen: never. i am dagen mcdowell. the president cutting his hawaiian christmas short. harry reid and democrats expected to lay the groundwork for yet another plan to avoid the looming tax increases and spending cuts. old man winter wiping out the holidays for many people in the country. his work is not done yet.

people worried about washington keeping their spending type. time for stocks now. nicole petallides is at the new york stock exchange. nicole: the dow is down about ten points. the s&p pulling back one quarter of 1%. a lot of the retailers loved like the biggest losers. 500 stocks are comprised and represent oriole to autos to airlines. the sector that was really lagging where the retailers. oil has been moving to the upside. there is a lot going on with that.

and oil spike of two dollars. now, let's take a look at technology. we do see some of the tech stocks doing pretty well. hewlett-packard and intel have been among the real losers for the year 2012 on the dow. today, you continue to see this trend which is a little better. back to you. dagen: thank you. the senate returning to washington tomorrow. the president, as well. five days left to revert the fiscal cliff. now that plan b is that, will there be a plan c or f for failing?

peter: president obama expecting to arrive in d.c. tomorrow. white house says they will let us know if there is any update in the talks for congressional leadership. the leader's office is me no news to report. as of now, we are still headed for the cliff. on january 1, the nation faces a $5 trillion tax increase over ten years to the expiration of the bush tax cuts. the lapse of the bush tax cut would mean the top would go to 39.6. tax rates would also go all for lower income earners. the maximum lowest rate going

back to 15%. four investors, capital gains rates would revert to 20%. dagen: i will not utter that word. thank you for that. growing pessimism when it comes to the club. some americans say we will get a deal. let's bring in ted kaufman. he is joining us from wilmington tell me what happens if we go over the cliff? >> i have been saying for a while we will go over the cliff. republican members in the house

have made it pretty clear they will not vote for tax increases. this has been around for 30 years. the simplest answer to this is what i predicted will happen and that is after the 31st that the bush tax cuts will expire and then there will be a bill in order to reinstate the taxes for everyone below the lowest 2% and republicans will be able to both about. i think that is what it will take to make this happen. dagen: are you surprised by the way washington has gone about this? when these were written, they were expected to sunset.

you leave every business and every american on the hope and on the edge of our seats. >> right. dagen, i do not mean to be partisan, i am not running for anything, will the republicans and the house vote for a tax increase of any time? i think that plan b that speaker boehner paul ford is a clear indication that they will not. at some point, the republicans have to say i will vote for a tax increase. even if it is a small one. [talking over each other] dagen: and you have on the other side digging in their heels about making slight tweaks.

lack of movement on the democratic side. >> no, you cannot, dagen. dagen: why can't you argue that? [talking over each other] >> the democrats have voted for this. what was the number one charge of the vice president ryan? it was democrats would reduce medicare. this is not that anymore. you cannot make that argument anymore. the beginning is when the republicans say i will vote for tax increases of some kind. i will guarantee you, guarantee

you they will vote for a change in medicare and the rest of it, but they have to say, look, this is both revenues and expenses on the table. this goes back to george bush and what he did in 1990. remember what happened to him. it is very difficult for elected officials to vote for something when they think it will be the end of their career. dagen: senator, that was, well, terrific conversation. thank you so much. it was great to see you. enjoy your new year. i will hold you to that. okay. i will hold you to it. >> you can count on it. dagen: be well. now, onto something just as troubling, but different. the weather.

big storms with freezing rain and high winds is expected from the midwest all the way up into the northeast. now we go to chief meteorologist at whether bell.com. >> it is a bout sore and it is part of what is dancing. each one a little bit further. we have a lot of winter weather coming. it will be shutting down a lot of flights from philadelphia of to boston. they will get hammered later on this afternoon into tonight. philly, new york, baltimore, i do expect it to turn into rain.

the snow will pileup northwest of those cities. 30 miles will make a big difference between four to 8 inches of snow and sleet and freezing rain on top of it. that whole major core door right on the battleground, it is almost all snow and up to a foot of snow. this is a nasty situation. we have one coming before new year's. i do not think it will be as big as this one. winter is definitely here. no question about that. dagen: how bad will winter get?

>> we do not have as that of winter as 2009, 2010 and 2011. it will certainly be worse than last year. people are saying fiscal whether it will just by. i believe it will go by and come right back in again. is we sell this in 93 and 94 and then it came on. it has been brutal in asia. people have been talking about how warm it is in the united

states. dagen: do not like it. not one bit. merry christmas. happy new year. >> it is the holiday season, you need some snow, but not this much. dagen: crazy amounts of snow in illinois and indiana. great to see you. merry christmas. happy new year. starbucks launches a new campaign targeting lawmakers in washington. retailers having a hard time prying that money out of their hands. oil that if you want to find something that is off, look at oil. near $91 a barrel. ♪

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satisfied, notify lifelock and you won't pay a cent. order now and also get this shredder to keep your documents out of the wrong hands-- a $29 dollar value, free. get protected now. call the number on your screen or go to lifelock.com to try lifelock proction risk free for a full 60 days. use promo code: gethelp. plus get this document shredder free-- but only if you act right now. call the number on your screen now! dagen: eight quarter past the hour. stocks now and every 15 minutes.

nicole: looking at research in motion. first, let's take a look at our market averages. some accelerated selling there on the nasdaq. we are down three quarters of 1%. we have been talking about the santa claus rally. the dow has been up about .8%. the trend has been somewhat to the upside. let's take a look at research in motion. it is a great day for them. the blackberry maker. it is up about 7% today. everyone is eagerly awaiting the blackberry tab on january 30, 2000. we will continue to follow research in motion. dagen: they better make it good. a big strike brewing. boston to houston threatening to

go on strike by early as this weekend. the strike could cost billions of dollars. a ten day port lockout in 2002 cost $1 billion a day and caused a major backlog and shipment. those same officials have called on the president to use emergency powers to avoid a coast guard port shutdown. talks broke down last week. federal ridi haters are hopeful to avoid a total shutdown. it was a customers tree this christmas with retailers slashing prices and hope of mary profit. did those deals bring in the dollar? adam shapiro is joining that story. >> it did not bring in the dollars the same way it has in years past. here are the numbers according

to its polls. this is not indicative of those holders. from the period of october 28 through december 24, sales only grew by seven tenths of a percent. sales grew by 2%. as we take a look at some of our favorite video, people actually shopping, the retail federation is sticking to its prediction. we will see year over year growth for the holiday season. they are predicting we will have a $586 billion season. what we are seeing through spending polls and shopping track where they downward vision, the reaction to superstar -- superstar saady. it may not necessarily be fear

over the country's fiscal problems and the negotiations over what we all like to call the fiscal cliff. then again, it could be that. dagen: thank you for that. starbucks has a new message for lawmakers and all those congressmen have to do is read what is written on their morning cup of joe. it is already too late for the pentagon. defense cuts are coming in a big way. a look at world currencies and how they are holding up against the dollar. ♪ [ malennouncer ] it's tt me of year again. time for citi price rewind. because your daughter really wants that pink castle thing.

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dagen: more good news for recovering the housing market. home prices in the 20 city index grew 4.3% from a year ago. chicago, new york were the only two cities with negative returns and october. starbucks urging washington to come together on the fiscal cliff. literally. the ceo is building employees that all d.c. area employees

should write things on the cops. they want to serve as a rallying cry. of course, that is also a marketing ploy. you can get there from here and faster than ever. service begins today on the world's fastest high-speed rail line. in china, of course, that here. it runs from beijing to southern china. it tops out at 186 miles per hour. compare that to amtrak, they travel at top speeds of 125-150 miles per hour. but that is rare. 150, when, show me, amtrak.

commodities are having a very bumpy ride. taking a look at oil. something we do not like to see if you drive a car. jeff flock has a very latest on this. jeff: a slow day at the cme. this is the euro dollar option pits. though oil. is very active. let's put up wti to start with. up over two dollars, up over $90 right now. just short of two dollars. you think, oh, do they know something about the fiscal cliff? not that at all. it is actually action in the middle east. reports of military exercises have commenced.

military exercises in there and later in the week more military exercises. brent is off as well. heating oils are up. everything is up. even on a slow day here at the cme in chicago. dagen: good to see you, jeff. jeff flock reporting. thank you. the pentagon planning to deal with half a trillion dollars in budget cuts thanks to the looming cliff. gun sales rising over concerns of tighter gun control laws. we can find some winners in the stock market. here are some of those on the s&p. ♪ she knows you like no one else.

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spew dagen: we have the latest on defense cuts and what it will mean for our economy and national security. egypt has a new constitution. the president hopes people will reinvesting in that country's economy. merry christmas from netflix. movie buffs left in the dark by a blackout on streaming. is it fixed? we will answer that now at the bottom of the hour. stocks now and every 15 minutes. nicole: we are looking at these

retailers. we are seeing a lot of retailers not doing that well today. macy's is a good example to show you. it is down about 3% today. coach and ralph lauren and the gap and game stop and nike, when you look at those in the top ten, the majority of them are retailers. the spending numbers for mastercard, october 28 through december 24, they said it rose .7%. you know what, a rise is good. it is our worst performance that we have seen since 2008. not a good showing for these retailers overall. the markets today are having somewhat of a hangover as well. the dow is down. dagen: thank you. my next guest that with the

president about the budget cuts that will hit if we go over the fiscal cliff. we are talking about sequestration. burial blakely -- great to see you. >> i think the president has stated very clearly that the cuts will not happen. we have a need for the congress to join him back here and washington and get a deal done. dagen: are you worried that there is so much attention being paid to the automatic tax increases and not dealing with the sequestration that would hit your industry hard? >> you have it exactly right. the slashing cuts in federal

programs will begin to affect everyone and affect us immediately. certainly, the defense industry is very worried. the readiness of our troops, the equipment they depend on, the technology that is the united states edged, that is what is really in peril here. we are all worried about that. we are worried about the layoffs that will come in the defense industry. dagen: have any of these cops already started to happen? what have you seen in the activities of these big companies? >> they have already had to start making plans. they cannot make investments. you cannot make investments if you do not know what to expect. no one knows exactly where they will fall and how. they have had to start doing layoffs at their plants because

the lines are slowing. pretty soon a lot of them are going to stop. then, you look at the domestic situation. air traffic controllers, just the other day, announced there would be more than 2000 layoffs of air traffic controllers. you can imagine what that will do in our airports. dagen: you will admit that there is some cutting that needs to be done and our defense budget. everything has to be looked at. >> everything has to be on the table. you are exactly right. we do need a balanced solution. what most people do not realize, though, the defense part of this has already been massively cut last year in preparation for this. $487 billion of cuts to the

defense already. dagen: marion, good to see you. marion blakely. be well. >> thank you. dagen: gun, rifle and ammunition sales have been skyrocketing this year. one of the world largest suppliers said it sold three and a half years of ammunition and a three day. last week. even before people were worried about stricter gun regulation after the shooting in newtown, connecticut. the fbi reported a record number of background checks for what their weapon purchases. it started to happen when president obama was elected to his first term. here is a look at some gun

stocks. then, netflix falling victim to a service outage due to technical problems. not of its own making. blaming amazon. shibani joshi has the details. shibani: it is called the nightmare on christmas eve. you have had a nice meal and then you turn on the tv only to download a netflix video or television show and it does not work. what are you supposed to do, talk to your family, watch the christmas show for the 14th millionth time? 27 billion of the 30 million subscribers were without access. it was finally restored 12 hours later. now, the blame game gets kicked

in. fingers are being pointed at amazon. it expands the technical problem and that led to the problems on netflix. "we are investigating exactly what happened and how it could have been prevented. it is amazon's problem. the web services division has experienced at least three different issues and blackouts in the past year. it is not just netflix that subscribes to it. it is other big websites, instagram, twitter, picturesque. there are not many alternatives out there for its customers. they may not be able to do anything. it could force some power in the hands of netflix. people pretty ticked off when

they have to talk to their family on christmas. dagen: i have hbo go. that is an option. shibani: there are lots of options. sometimes you want things to work, especially on an important that like christmas eve. dagen: yes, it is cold owing to the seven 7-eleven for eight hours. if you want to get away from your family, you know. so i have heard. shibani joshi, thank you for that. egypt's president signing and a new law. how important egypt is to the u.s. courts lack we will talk

about treasuries and borrowing costs. ♪

>> i am tracy byrnes with your fox business brief. it is another tough day for markets. right now, the dow is down about 57 points. murphy oil has reached a deal with walmart to build gas stations at the superstores over the next three years. though oil and gas giant approved a spinoff of its distribution business into a new company. toyota estimates that worldwide sales are up.

this year's job will push toyota back to a top spot for the first time in two years surpassing general motors. that is the latest from the fox business network. giving you the power to prosperd ♪ oh no, it's actually my geico app...see? ...i just uh paid my bill. did you really? from the plane? yeah, i can manage my policy, get roadside assistance, pretty much access geico 24/7. sounds a little too good to be true sir. i'll believe that when pigs fly. ok, did she seriously just say that? geico. just click away with our free mobile app.

dagen: egypt's president signing into law a new constitution. also, one that the president hopes will stop egyptians from running away from the egyptian economy. they approved a new constitution with a 64% vote in favor of it. what does that mean for our interest in the region. john bolton is here with more. capital flight, that is egypt's number one concern. should they be worried about fight of our dollars out of the

country? >> i think there are people who are worried about going into and insecure situation. i think morsy does have to worry if he carries through with some of his campaign rhetoric. a lot of the aid, really, though both of the aid that egypt gets from us is because of camp david. dagen: what is the likelihood that you think morsi does that? >> i think he is moving towards it step-by-step. we are telling the military not to even take about it. it would be a substantial step. i worry about russia. it goes back decades now. i worry about the radical nature of the muslim brotherhood

ideology. however much it may hurt them in the short term, the idea of harming israel may be enough to send them over the edge. dagen: you see that the middle east is increasingly unstable. ongoing developments in syria, iran you have oil well above $95 a barrel this morning, will this situation. increasingly fragile for the u.s. and how will the white house deal with it? >> i think it is becoming more fragile. you add the instability can't you add the threat of iran's nuclear weapons , all of this, i think that is in the edge of a real major problem. i think our influence has been limited by the lack of

attention. dagen: we talk about this very often, but should their attention first and foremost be focused on dealing with iran? >> i think the nuclear weapons program that they have been pursuing for 20 years is the most critical threat in the region. there are plenty of others to go along with it. if they get nuclear weapons, and they are very close to achieving that, the power changes forever. other countries will get nuclear weapons also. saudi arabia, egypt, turkey -- they will get much more seriously unstable. dagen: ambassador, it was great to see you. happy new year if i do not see you. former ambassador, john bolton. stocks now and every 15 minutes. nicole: you remember last week, we will pull up today's chart,

as well as a one-week chart, this is really a one-week jar. there is herbalife. it has been quite volatile. it is making its way back. they have been shorting the company. they did not think the company was being run in the right way. they called it a peer amid scheme. in the meantime now, working with law firms about this whole thing. herbalife has come out denying the findings that they think it is a peer amid scheme of some sort. when you have these big guys coming out and say we are shorting stocks, they get hit

hard. very hard sometimes for these companies to kind of real back. today it is up $1.39. the dow is down 47-point right now. the s&p at 1418. losing just over a half of 1%. back to you. dagen: a lot of worry over nothing. a look at the treasury markets next. we will see if there is a new word there about the fiscal cliff. we found some more winners on the nasdaq. ♪ with fidelity's new options platform, we've completely integrated evy step of the process,

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dagen: japan's new prime minister vowing to tighten ties with the u.s. as he works to revive the economy. some worry he will pay little attention to funds needed for growth. how does that sound familiar. the japanese market light to the news. the nikkei trading higher today. let's take a look at the ten year treasury. a gauge of how much work the federal reserve is doing by those very treasuries. it is down a little bit today. four more on that, let's bring

in chris aarons from ubs. fiscal cliff, what happens to interest rates long-term? >> over the short term, they will respond to the movement in the equity market. today, we are seeing a bit of a down movement. since august, bond yields have traded 155 2185. right now, they are sitting on a 200 day moving average. i think for now, we are waiting to see what happens in washington. dagen: there is so much of the burden put on the federal reserve. >> i agree.

there is a cap on rates. one of the things they could do is cap rates to the purchase operation. dagen: you do not think unemployment will get as low to force the federal reserve to move sometimes in the next month? >> it does not seem likely. it has moved down over the last 12 months to 7.7. if you look at their central tendency forecast, it is not until 2016 that they expect the

unemployment rate to get to levels that are inappropriate. dagen: would you be a buyer? >> it is very hard to advocate at these rates. the reason you buy treasuries at these levels is to preserve capital. your risk is so asymmetric at this point. you may get 20 basis points of downside in terms of a rally. your upside is pretty significant. dagen: does the average investor understand that risk? >> i think not. dagen: if you have inflation --

[ laughter ] >> you are also losing on a real term basis. we can debate whether there is upside or downside risks to that. dagen: great to see you in person. thank you so much. happy new year. it is beginning to look a lot like recession. christmas sales struggling. dennis kneale and shibani joshi are up next. trying to generate some sales before they close their books on 2012. ♪ this is karen anjeremiah. they don't know it yet, but they' gonna fall in love, get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money. [ dog barks ] because right after they get married, they'll find some retirement people who are paid on salary, not commission. they'll get straightforward guidance and be able to focus on other things, like each other,

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shiboni: i am shibani joshi. chris: i am dennis kneale. is beginning to look a lot like recession. lackluster christmas sales making retailers worry if not marion stores making up by

cutting prices now. shiboni: the fiscal cliff years getting much of the blame for christmas shopping spirits. president obama cutting short his vacation with time running out for a deal. chris: one bright spot in this negativity, housing. home prices up in most major cities. shiboni: top of the hour. stocks every 15 minutes. nicole petallides on the floor of the stock exchange. wall street also souring on a mention of this deal . carolyn: on the tour before the with half-day of trading, stock market closed at 1:00 eastern time. it was quite evident, let's call a spade a spade, up one day before christmas they're not doing anything. certainly doesn't look like they will get done quickly and even proposed it may move right into

the middle of january and figure out a way to extend and get that done at that point. the fiscal cliff remains, the woes remain, the worry and uncertainty remain on wall street which makes it hard for wall street to take off. it leave the wild card and that is not a good thing for the stock market. today is a lighter day of trading. we have a long weekend, the first is another day off. the dow jones industrials are 13,106 so dropped 0.4% and can be nasdaq ntsb down 1/2%. let's take a look at zynga. this is a name we follow and zynga has been crushed this year down 75% but the day getting a pop, there has been talk about real time gaming sites over in the united kingdom. so up 3.5% today for zynga. dennis: thank you. getting the blame for much of the downturn in the dow this

morning, retail sales coming in at disappointing low levels. shibani: they're cutting prices in order to make up some of the lost shopping during the week and frankly during the year. adam shapiro joining us with more. a lot of times we see the high end and hold off during the holidays versus the low end. are there any winners this year? >> sax is offering 70% off on some items. there are e-mail coupons, lot of retailers are offering for 30% to 60% off. when you look at the numbers this may not be the holiday shopping season they anticipated. let's look at what happened according to spending pulse. it is reflective of all kinds of spending not only credit cards the cash, checks, sales growth between october 28th through dec. 24 will only grow by at 0.7%. we got the numbers last week on monday regarding another survey

which showed it is time to revise the holliday growth period. shopper track was telling us on monday that they are revising 3.5% growth to 2.2% and national retail federation, they are still holding to a fact they will see year-over-year growth by 0.4% with $586 billion season. the problem is spending polls track might be off. superstorm sandy hid the regions of the country where we saw the biggest dropoff in spending in that period between october 28th and dec. 20 fourth. there were some rebounds. shopping came back in the last part of holiday shopping season until christmas eve but it was not sufficient to get back on track to what everyone expected. dennis: thank you. with weaker than expected retail numbers we will be heading into a recession next year. shibani: jim laventhol says in many ways yes, but it won't be a

disaster. welcome to the show. you heard what adam said, that the consumer which accounts for 70% of the gdp, spending, they are pulling back and pulled back this year and during holiday shopping season. how close are we to start getting into this talk of getting into recession again? >> we're pretty close by i appreciate your pudding a qualifier that we don't have to go into a panic. there are a couple reasons for that. if you look at the stock market which is mainly where people place risk bets on growing their assets it is arguably fairly priced, somewhere between 13 times and 14 times this year's earning so not like there's a wild overvaluation that needs to be corrected, nor is this like in 2000 where we had an overinvestment boom from telecom and tech spending more 2007 with the housing boom. you have none of those imbalances. the financial sector is in great shape. even though gdp of the u.s. is

flashed the first half of the year which is where we think it is going to be that doesn't mean the stock market will come off. we see another 5% down in the stock market as the stock market comes to grips with the fact profit growth is going to be flat in the first half of this year. dennis: one problem with that bearish forecast, another 5% downside risk, a lot of people have been bearish all year long and we are at year end and the s&p 500 is up 13% this year and all the bearish is down on that. >> valid point. you can't argue with the numbers. the s&p 500 is up 15% when you include dividends and i thought at best it would be 10%. i am in that camp. having said that we obviously can't drive in the rearview mirror. we have to look ahead. i think i am being realistic as opposed to pessimistic. i will shed the bear label because it is not where my heart is. i am optimistic on things going

forward but realistically if i look not only at retail sales but freight car loadings as an indication of the overall movement of goods in the economy they are down year over year consistently the last month. we see things are pretty tepid, not disastrous. shibani: let's talk about the gridlock in washington. it is almost certain that we are not going to get a deal by the end of the year. we are pressing on tax cut, tax hikes and spending cuts that could impact every taxpaying american out there. what is the market going to do and how quickly will it hang on and have this hangover washington is imposing on us? >> hard to predict stock market movements in the short run. my best guess having thrown caution to the wind is if no resolution is on the table the stock market will sell off. similarly to what happened when t.a.r.p. was voted down in fall of 2008.

shibani: that was huge. several hundred points. >> that will get some religion in to politicians in washington and they will get their act together and make a resolution. certainty is what we are looking for. not that we need the fiscal cliff result one way or the other but we need certainty. we need policy in place so people and corporations know how to spend money. dennis: certainty promised is pretty bleak. two million more job losses, the nation would go into recession again. doesn't have to be the end of the world that politicians want to avoid. widened to of view say we're going over the cliff, there's a chance they get this thing done? [talking over each other] shibani: no one is doing any work today. >> things can happen. we have seen things happen on a short time from. i was amazed when i woke up this morning checking news feeds that everyone was enthusiastic about the deal coming together. absolutely nothing from an evidence point of view would support that between today and three days ago but you are right

that things do happen on a short time frame. let me say one more thing. you are right that the fiscal cliff is disadvantageous to the economy in terms of jobs and taxes but if we know we are going over the cliff that provides policy certainty that allows corporations to act within the certainty of the new tax regime that comes out of it and it will help the deficit. i am speaking anathema but that is certainty. shibani: 70 -- dennis: something wins and the economy could make stocks right at some point. thank you very much, jim laventhol. here's one retail segment that did great. gun, rifle and ammunition sales are skyrocketing following the backlash against guns at the connecticut elementary school. the world's largest supplier of firearms says it sold 3.5 years worth of ammunition clips for automatic weapons in just three

days and a gun shop owner north carolina says gun sales for christmas or four times better than last year. many customers blame talk of stricter gun control for driving the rush. unintended consequences. let's look at gun stocks. the images that so smith and wesson, they are down. the middle of their sales are probably up. shibani: one of the most profitable industries out. 20% profit margins for gun sales. dennis: computer hardwaremakers 5%. shibani: on a business base is a lot of people trying to cash in because they're worried about stricter gun control laws and that is a boon for sales right now. president obama cutting short his hawaiian vacation and will be in washington tomorrow. dennis: congress also set to return to d c tomorrow perhaps mounted what everyone hopes will be a last-ditch offered to stave off the fiscal cliff. peter barnes joins us from the belt way. peter: here's what the official

spokespeople for all the leaders are saying about this this morning. from the white house, quote, we will let you know if we had any updates. from senate democratic leader harry reid, quote, nothing to report. no conversations with republicans yet. said republican leader mitch mcconnell, quote, no our reach for many democrats. we talk to the speaker's office all the time and always do but the house passed legislation and we are waiting on senate democrats. house speaker john boehner, quote, nothing new and from democratic leader of the house nancy pelosi, her spokesperson saying, quote, i don't know anything right now. as of now the cliff remains clearly in sight. if nothing is done on january 1st, the nation faces a $5 trillion tax increase over ten years through the expiration of a george bush tax cuts and assuming congress does not approve its annual patch for the alternative minimum tax and medicare doc fix that prevents deep cuts in medicare the laps of the tax cuts would mean the top tax rate would revert back to 39.6 in the clinton

administration from 35% now but taxes will also go up for tax rates would go up for lower-income earners. the maximum lowest rate reverting to 15% from 10% and for investors capital gains rates would revert to 20% from 15% and depending on the analysis the average family would pay 2,000 to $4,000 more in taxes next year. dennis: quick follow-up. in terms of profitmaking in washington is now officially impossible to get a fix in place by december 31st? is it impossible? peter: it is not impossible. you are probably referring to this three day period that the house requires for reading legislation. in theory if the senate did something by friday, they would have saturday, sunday and the house could vote on monday, but if we got into pingpong, good

luck with that. dennis: thank you very much. shibani: christmas miracles can happen. snow and wicked wind preventing thousands from flying home this christmas. join me live in the weather center as the storm moves towards the northeast. watch out for that. dennis: less miserables winning bid at the box office. we will tell you about this. shibani: as we do every day at this time we will get oil prices inching higher, 2.6%. good day for oil. [ male announcer ] this is joe woods' first day of work.

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dennis: 15 past the hour stocks every 15 minutes and team coverage. jeff flock in the trading pits of the cme where oil is on a tear. first to nicole petallides on the floor of a stock exchange where stocks are turning lower still. nicole: we see markets under pressure here to the downside. volume is fair because a lot of people don't necessarily get in and do the big trade on december 26th but i can tell you when i walk around here not too many people missing today, everybody showed up refraction. the nasdaq composite is down 0.3%, a majority of dow components have been to the

downside. the dow is down 1/3%, not a significant move but it is to the downside and the s&p down 1/2% which brings me to urban outfitters. a lot retailers are leading the s&p 500 on the downside, names like ralph lauren and game stop, urban outfitters, we saw a disappointing selling over these two months comparatively, the worst since 2008 and moving to the home builder's which is a different picture, the case schiller numbers in and that has shown continued growth. it has been slow for housing and we have seen strength in housing and improving some but when are and some of these names giving back gains from earlier, the home builder's getting back to the gains. that it will latest on the floor of the stock exchange. let's check out what jeff flock is looking at. jeff: you just set a lot of people have shown up. i walked down onto the floor

here and as we go, not as many people here. fair to say there are fewer traders now today on the floor of the cme than typical but oil traders, anyone not here is our ritter not here because a lot of volatility with oil. let's look at wti and branch, you almost see four issues but the traders we talked to say not so much optimism over the fiscal cliff, it is tough in the middle east, starting with a problem with production out of iraq. they have suspended production and they were shipping 1 eighty billion barrels a day, they have shut that down due to overpayments with baghdad. the kurds ruling themselves, not too happy with baghdad payments and out of iran two sets of military exercises. one in the gas field, the world's largest gas field, military exercises is there and later in the week military

exercises in the strait of hormuz, that is having an impact in the oil complex including gasoline and heating oil. those are moving higher as well. there is nothing like middle east issues to from everything else when it comes to oil. shibani: good reminder the fiscal cliff is not the focal point of the entire world. we showed up to work today. home prices are through the roof. how can you prosper from it? that is the question. dennis: the fiscal cliff grounds for concern. starbucks launching a new campaign to perk up washington. shibani: here is how the world currencies are faring against the u.s. dollar. [ roasting firewood ]

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shibani: 2012 good year for housing in the latest case children deck showing home prices on the rise year over year beating expectations in october climbing the most in over 22 years but is the recovery short-lived if we fall

off of the fiscal cliff? joining me now with his take is sam chandin. great to see you. we got to talk about housing. it has been a pretty good year so far. the latest reading from case schiller also showing pretty good gauge. what can we expect going ahead? >> if we resolve the fiscal cliff, consumer confidence stays intact, if we see modest improvements in job creation, the fact that housing is showing resilience, will really supports and continued gains. lot of people out there when they do start to see the price trajectory turnaround are going to say with mortgage rates as low as they are and prices starting to climb now was the time to jump into the housing market. shibani: there are positive factors but one not so positive factor is this fiscal clip, that could force people to pay more taxes, could impact of the across-the-board. how worried are you? how worried should we be about

the state of the housing industry and what happens in washington? >> absolutely. applicable latest data housing is actually contributing to growth right now but it is one of the few areas contributing in a meaningful way. we could see that the rail. the fiscal cliff is not resolved expeditiously, if what we see is that has an impact on consumer confidence, on businesses will into higher so employment slows down those two things we don't have in place could take a very serious toll on housing outcomes and the housing market as much as any other sector of the economy is a critical issue. shibani: what about hardest hit parts of this nation, places like detroit and las vegas which bear the brunt of the hardship. how are those cities fairing? >> greg point because although the index overall was up what we see is fairly different outcomes across metropolitan areas. new york and boston fairly flat in terms of year-over-year gains but phoenix and detroit some of

those markets where prices declined the most have more room to rebound so the numbers are better but i stress all so that the case schiller 20 markets are fairly large metropolitan areas. there are much larger number of small metros in smaller towns across the country that are still struggling to develop momentum. shibani: so much of the average perception of housing is their own home price going up. at one point you think the average american is going to be able to say i feel confident about what is happening with my district, my home and the overall industry? >> that is a dynamic supported by what people are reading in the press and seeing in these indicators and some of these indicators might be national in scope, they are headline numbers. that does a lot to help change perceptions around where we are in the housing market and could help build momentum. it could be the thing that drives the inflection point. shibani: 2012 was the year the

housing market came alive. let's hope it continues. everyone needs it to. thanks very much. dennis: a big strike brewing. thousands of dockworkers from boston to reduce and threatening to strike as early as this weekend. business groups and state officials say the east coast strike would cost billions of dollars, a ten date port walkout in 2002 cost $1 billion a day and a major backlog in shipments. the same officials called on the president to use emergency powers to intervene to avoid a coastal wide port shutdown. dockworkers, longshoremen, the shipping companies broke down last week but federal mediators hope to avoid a total shutdown. shibani: a small deal to hold off some of the fiscal cliff, it looks like washington's only option at this late hour. dennis: a white christmas in many parts of the country but now stopping people from getting

back home. we are live at the fox weather center. shibani: let's look at the winners in the s&p 500 index. copd makes it hard to breathe, but with advair, i'm breathing better. so now i can be in the scene. advair is clinically proven to help significantly improve lung function. unlike most copd medications, advair contains both an anti-inflammatory and a long-acting bronchodilator working together to help improve your lung function all day.

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dennis: starbucks fills washington to come together and address our debt problems right now. more hassle from old man winter, with the holiday disruptive in some parts of the country and more bad weather threatens to take a travel home unbearable and taylor swept raking in big

bucks at the top of the charts and doing it while spurning the huge audience on internet streaming services. shibani: we get to stocks every 15 minutes. back to nicole petallides, what you looking at? nicole: watching the market to the downside. dow jones industrials down 50 points, the fear index has an up arrow. some names that are movers, continuing to watch cablevision. stock is not moving much. we file a lawsuit in new york and long island, about defamatory claims, the speed and quality of its internet service, this is against one of the unions in new york so keep an eye on cablevision and how this turns out. zynga as we talk about possible gaming in the u.k. jumping 3%, nike agree representation of retail which is under pressure across the board, apple down $8 and bank of america of the no. one performer on the dow jones

industrials up 2%. dennis: thank you. growing pessimism with less than a week until the fiscal cliff deadline. 50% of americans say we would get a deal, 48% saying it is a no go according to a new gallup poll and that is a big change from a poll conducted last week. we are joined by washington bureau chief jerry side. john bbehner and republicans were unable to do it. now the focus and pressure shifts to the senate and the democrats. >> in the senate is democrats and republicans because last year when we were in this fix couldn't get out of the debt ceiling crisis it was harry reid, the democrat leader in the senate and mcconnell, the republican leader who emerged as adults in the room and worked up something that got through congress. we are on the verge of something like that or at least an attempt to replicate that. how much of a role will whitehouse play, might just be as in 2011 the two senate

leaders decide they can take care of this themselves. we will see when president obama gets back tomorrow. dennis: small, thinking a smaller deal rather than something sweeping. >> there was a sense the week or two ago that you have a big deal or we go off of the cliff but dynamics change next week and the reality is what is possible here is a small deal probably something that deals with the tax breaks or tax levels for most americans under $250,000 or maybe half a million dollars being extended, great uncertainty about everything else including tax rate for others in spending cuts and decisions kicked into next year seem to be possible and if that is possible the kind of deal i just described is probably only possible through the house with an equal number of democratic and republican votes. that is the most likely scenario right now. dennis: would this be a positive scenario? a small agreement with bipartisan support.

is that a victory or is the humiliating and a defeat for both parties? >> good question. the answer is as opposed to what? a victory as opposed to going over the cliff. probably a good thing as you suggest to get something passed with some bipartisanship. he going to the year next year with lots of decisions have to be made and clear partisan divisions in the house particular need to establish a precedent that something could pass with equal numbers of democratic and republican votes would not be a bad thing. the question is whether it would be empowering to john boehner or undercut. hard for him to put something on the floor of the house that doesn't command support of the majority of republicans. his own republicans in a house. that is tricky about the current environment. dennis: his party left him hanging last time around on that plan b. if we go over the cliff and don't get a deal by january 1st,

can't they get a deal week or two later? is not the end of the world. >> absolutely right those things get very hard. making a fix to the alternative minimum tax which will hit millions of americans at the end of the year unless something is done, retrofitting that will be difficult. it will be hard to get over the market's psychological impact of going over the cliff even briefly. one of the interesting things is the markets have been very blase about this. they think something will happen in the last few days of the year. if that doesn't happen there will be a psychological jolt because expectations will not have been met. that won't be a good thing but washington be in washington you can retrofit any solution and walk it back to the first of the year even a couple weeks into the year. dennis: a little bit of hope. thank you. shibani: starbucks taking of a fiscal cliff matters into its own hands. it wants lawmakers to wake up and smell the coffee. i don't think it is the only

one. the company urging washington to come together on the fiscal cliff. literally. howard schultz is telling employees all-around the d.c. area for them to write come together on customer cups, tomorrow and friday, politicians return to the capital to deal with the fiscal cliff. schulz says the cup campaign aims to serve as a rallying cry in the days leading up to the january 1st fiscal clipped deadline and thereby increase their weight time for a cup of coffee. dennis: no word whether the deal will sue over misappropriation of that phrase. shibani: schulz taking matters of forcing a deal. dennis: i am sure that will work. nothing else has. looking really nice that christmas but it is wreaking havoc on people trying to flee their in-laws and fly home today. we are live in the fox weather center.

shibani: speaking of travel we have last minute new year's deal ahead. you don't have to stay home. we have great deals. take a look at this ten year treasury.

>> i am lauren simonetti with your fox business brief. there's a sea of red on wall street as washington prepares for another round of fiscal cliff wheeling and dealing. dow jones down 50 points. cablevision filed a lawsuit in the supreme court against the communications workers of america for making false claims about its internet service and

britain alleging that district 1 and local 1109 engage in an unlawful campaign to suspend cablevision and its business and the ipad mini is fresh off of manufacturing line but reports of a new ipad are already circulating. you must be wondering what another ipad offer that is new. it will look like a mini in terms of design and will be fair, narrower and shorter. that is the latest from the fox business network giving you the power to prosper. question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approv to treat ed and symptoms of bph, like needingo go frequently or urgely. tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. do not drink alcohol in excess with cialis. side effects may include headache, upset stomach,

delayed backache or muscle ache. to avoid long-term injury, seek immediate medical help for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a 30-tablet free trial. shibani: not so friendly skies, 6 ended flights facing delays or cancellations as wild winter weather whips through the country dropping heavy rain and snowfall across the midwest in deadly tornadoes popping up in the south as well. dennis: the fabulous maria molina joins us from the weather center with the latest. >> good to see you. we are talking a significant

storms system producing all kinds of severe weather in the form of snow and tornadoes. 30 reports of tornadoes yesterday. on christmas day and very unfortunate damage to homes and we had injuries reported with that. very bad news with this storm system. the storm still producing all kinds of weather today in the form of blizzard and more severe weather potential travel delays across portions of the southeast. right now we're seeing delays across the northeast but typically in the la guardia airport, delays over an hour. in need patience today. we seen some improvement with the leas averaging about 30 minutes. you can see heavier rain is already spreading northward moving into portions of philadelphia and the white stuff is no coming down across portions of pennsylvania. things are going to deteriorated as we head into later this evening. and into tomorrow morning,

across the northeast, wind gusts 60 miles an hour, and very heavy snow, over a foot of it across interior sections of the northeast. as far as severe weather in terms of tornadoes we have a tornado watch in effect across eastern north carolina and eastern south carolina, and 5:00 p.m. eastern time a you see thunderstorms that fired up around wilmington, and can produce those, issued for the county, got to see shelter immediately. we do not have a basement, and go to the lowest level with interior sections of the home, a big concern, we have a blizzard warning in effect across indiana and ohio. shibani: look sector will be a messy one. but if you are one of those souls willing to battle the

severe winter weather to take on sunny skies, we have some ideas. and that will be tips for ideas on how to escape, i was told to check in on you to make sure you are okay, and with palm trees looking a little gizmo. a little cold today. and this is data, shirt. and use some of your own advice. people are thinking maybe i will get out of town over the next week, they can go internationally and domestically. let's start off domestically. what are the deals out there. >> the planes will be full nd next -- up until new year's, and the cancellations and delays, a and a fortune but after the new

year's, in fort lauderdale, in washington d.c. $119, you may have to be flexible tuesday, wednesday, saturday, seven days a week, out of new york and boston and places like that under $200 and january and february, anywhere from 10 degrees warmer in fort lauderdale and miami that orlando and tampa. florida is a good place. my son lives in orlando. look what i look like and i am freezing. that is a good one. if you are looking for a guarantee, 82 degree weather place, maybe you want to look at san juan, pr. we are seeing some dirt cheap air fares. if you live in florida and want to get away from the snowbirds go from orlando, tampa or for lauderdale to san juan for $189. if you live in new york or boston you will find the mid

200s. even hawaii, you will lose all your crew today because in january, newark to honolulu, by the time you get there, it will be all gone but $419. >> you are going to lose a great deal. we have a little time. i want to get quickly, first class domestic fares, you can get a good deal and fly up front. quickly. >> check three bags for free. washington d.c. to fort lauderdale looking at 439, 6 foot tall or five foot tall, extra legroom, i could drink that kind of beverage for that kind of phrase. in new york 500, even san juan, pr out of dallas and chicago, first class, mid seven hundred range. shibani: you had a vacation. thanks very much.

looking forward to your palm tree shirts in return. see you soon. dennis: is 14 minutes till. stocks every 15 minutes. the dow looking bad here. nicole: looking great on wall street today as far as the numbers if you are bullish out there and hoping for some strong finish the day after christmas. here is on look at the dow jones industrials down 55 points. a majority of names have been under pressure. i have seen names like bank of america and hewlett-packard doing nicely with bank of america being a top winner but on the down sides, united healthcare and boeing have been under pressure. we have seen j and j and pfizer going back and forth and microsoft had a down arrow earlier. there's a look at the nasdaq down nearly 1% and below the 3,000 mark again as well. this is the environment. certainly commodities and people talk about oil, oil is up $2 and off of highs earlier today, that

is a major factor in this market. dennis: more to the next big government bailout than meets the eye. liz macdonald tells us the white house is backing a plan to help out underwater mortgages and not just for government underwritten loans. shibani: let's take a look if you own these stocks on the nasdaq you are making money today. research in motion, netflix, a lot.

dennis: the christmas movie box office cannot non-violent are rated westerns by quentin tarantino against a broadway musical based on a nineteenth century novel, was miserables and the musical won. universal's less miserables broken 18.one million dollar guarantees, tarantino break-in $15 million, the highest level christmas opening for and are rated film. elsewhere taylor swift is breaking up with stream music services. turn newest album read finished fifth week at number one but she refused to make it available on internet streaming services that the attendees her songs. other music acts may take notice. a great story in the wall street journal. an office building, number one times square, the bad news, it

is mostly vacant. the good news is it brings in $23 million a year in ad revenue on its digital billboard for duncan doughnuts, sony and others, it is worth $500 million up almost 5fold in 15 years. shibani: your tenants are not paying anything and you pay your rent. dennis: more of that and the government housing bailout makes it bigger. the white house is quietly backing a plan to help underwater mortgages in a big way. liz macdonald is here with more in the bottom line. liz: involves getting more mortgages that are underwater refinanced with the help of fannie mae and freddie mac. let's go through it. if you own more on your mortgage and what your home is worth there's a possibility you could get at refinanced mortgage. you have to be current in all your payments for five years and you get to refinance for a lower mortgage rate. the lower rate mortgage would be backed by fannie mae and freddie

mac. the thing is we own fannie mae and freddie mac, taxpayers own fannie mae and freddie mac and essentially they are supposed to be run to get back in the hands of shareholders. now they are being run at the expense of taxpayers. here's the deal. a fifth of all u.s. mortgages are under water. that is 22% equal to eleven million homes in negative equity. the white house wants to boost the number of spenders out there in the u.s. economy to help the u.s. economy deride itself and to do that they want to allow the some prime negative equity borrowers to resurface out of their underwater mortgages and the number of refinancings have been moving along nicely. lookit 60,000 in 2011. i got to tell you the key is not only fannie and freddie would charge more on that refinanced mortgage, but it has to deal with the banks, particularly will the banks agreed to not have any put backs of loans on

their own balance sheet, banks say we would rather have those rotten mortgages. if they do default unbalance sheets of fannie and freddie meaning taxpayers expense, the bailout could get bigger in the housing market. dennis: they have only been offering these bailouts to loans that are already backed by government. this would jump over the fence to loans people take from banks to get government guarantees to probably originated loans. liz: that is the deal. you had to change the charter at fannie and freddie to do and whether congress goes along remains to be seen. dennis: liz macdonald. liz: millions of netflix customers were out for the count on christmas eve, thanks to technical problems from service provider amazon. it started at 3:30 in the afternoon on the east coast and prevent users from streaming videos from a number of devices, the play station, the list goes on and on. the problem was resolved for all

customers by yesterday morning and netflix has said it is currently investigating the cause of the disruption. netflix uses amazon's web services to host most of its data. that we to companies happen to be going head to head as competitors when it comes to streaming videos leading many people to wonder could the end been here for these two in a partnership? amazon has ditto streaming servers and netflix doing the same thing. dennis: the biggest video service in the world would arrive on arch rival amazon like pepsi asking coca-cola to fill -- shibani: there are not many alternatives out there. may push some to do that. dennis: netflix flow of money on a program to keep other costs down. the president is cutting his hawaiian christmas short. what harry reid and the senate democrats will have waiting for him in washington is a big question. shibani: old man winter wiping out holidays for some people in some parts of the country and his work is not done yet.

lori rothman and tracy byrnes are up next on markets now.

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